Air passenger duty should be abolished across the UK, a Stormont committee has said.

The tax hurts businesses, fliers and the wider economy, said the cross-party group of MLAs.

In November, air passenger duty (APD) rates were cut to £12 per passenger in economy and £24 for business and first-class passengers for direct long-haul routes from Northern Ireland airports.

The committee report said: "APD is a regressive tax which is particularly disadvantageous to businesses, consumers and the wider economy in Northern Ireland, given both the peripheral location of the region, which results in greater dependence on air travel, and the proximity to airports in the Republic of Ireland, which hold a competitive advantage."

Last autumn's reduction in the rate of duty guaranteed the continued operation of the Continental Flight from Belfast International to New York/Newark, which was under competition from Dublin. The cost of the tax could have killed off the daily service between Belfast and New York.

The old rates added £60 to an economy fare and £120 to a business ticket. Continental said it had been absorbing the cost in Belfast in order to avoid passengers simply opting for Dublin.

This, the company told MPs recently, would cost them £3.2 million this year and meant the route was no longer viable.

The Stormont report said: "The negative consequences for Northern Ireland will be exacerbated by the further increases in APD rates levied by the UK coalition Government from April 1 2012.

"These increases are being applied despite evidence that APD is also damaging the wider UK economy. The Executive, in the first instance, should continue to press the case with other devolved regions, local authorities and other bodies throughout the UK for the abolition of APD."

The committee welcomed proposed devolution from London to Belfast of APD rates on long-haul destinations as an important step towards redressing the disproportionate burden of APD on Northern Ireland. It commended ministers for action to safeguard the Belfast-New York connection.